NHS contractor Palantir will suffer $200bn wipeout, says Big Short investor

Chris Price

Fri, February 13, 2026 at 11:02 PM GMT+9 3 min read

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Michael Burry correctly predicted the housing market crash before the 2008 financial crisis - Jim Spellman/WireImage

The US investor made famous by the film The Big Short is predicting that NHS contractor Palantir will have $200bn (£147bn) knocked off its value in the coming years.

Michael Burry, who correctly predicted the housing market crash before the 2008 financial crisis, said Palantir’s success in recent years was built on “bluster” fuelled by the AI bubble.

The company, founded by Donald Trump’s ally Peter Thiel, had overplayed its AI credentials, according to Mr Burry.

He claimed that Palantir was a consultancy rather than an AI business, stressing that it could be “easily replaced”.

While it is best known for its work with intelligence and military agencies in the US, Palantir was also handed the biggest IT contract in NHS history in 2023 to bring together medical information from across the health service.

Mr Burry, who was played by Christian Bale in the 2015 Hollywood movie, said everything the company does “already exists” – claiming it had taken advantage of an “ignorance window” on how AI works.

He said: “After a few years, it is likely many clients will come off their FOMO and realise they can do it themselves cheaper.”

Palantir’s work in the UK also saw it build the Covid dashboard for the Government – which presented daily data on vaccines, deaths and hospitalisations during the pandemic.

Under its latest contract with the NHS, Palantir was tasked with joining up existing NHS data in a bid to speed up diagnosis and reduce waiting times and hospital stays.

However, official figures this week showed that A&E trolley waits have risen to their worst on record – with more NHS patients than ever facing 12-hour delays last month.

‘Emperor Palantir has no clothes’

In a post on his Substack on Thursday, Mr Burry said Palantir was little more than a consultancy which had gained attention after “management flooded its earnings calls with mentions of AI”.

He said its chief executive, Alex Karp, had initially been “blindsided by ChatGPT” and other large language models, only then to decide that he could “spin this as Palantir is AI”.

Mr Burry said: “Like Trump, Karp figures bluster has gotten him pretty far, and so will continue in that mode.”

Palantir has previously hit back against Mr Burry’s criticism. In late 2025, Mr Karp branded the investor “bats–t crazy” for predicting such sharp falls in its stock.

Alex Karp, Palantir’s chief executive, has previously described Michael Burry as ‘bats–t crazy’ - Krisztian Bocsi/Bloomberg

Mr Burry, who appeared to close down his hedge fund Scion Asset Management earlier this year, predicted Palantir would ultimately be worth less than $100bn.

That is less than a third of its current market valuation of $307bn, down from a peak of $491bn in November.

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He calculated that a fair value for the shares would be around $46, which would mark a 64pc drop from its $129 closing price on Thursday.

Mr Bury said: “Palantir’s customers using its software for the first 20 years did not value it highly enough to pay rates that would make Palantir anywhere close to profitable.

“All those customers were subsidised by nearly $4bn from investors. $4bn that involved mostly the cost of installing and supporting the software rather than actual [Research and Development] developing the software.

“Now, with AI on the scene, everything is supposed to have changed.”

He added that “well-heeled competitors” in the software sector “are studying the landscape” after being bruised in a recent sell-off over concerns that AI will disrupt their business models.

Mr Burry said: “They may pounce before or after savvy customers realise Emperor Palantir has no clothes.”

Palantir declined to comment.

The Department for Health was contacted for comment.

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